Under Friday's deal, Dobson shareholders will receive $13 a share, a 16.9% premium over the company's closing price of $11.12 on Thursday.

Dobson markets wireless services under the Cellular One brand and has provided roaming services to AT&T and predecessor companies since 1990, AT&T said in a news release. Dobson has 1.7 million subscribers.

The deal is subject to regulatory approval, but AT&T said that, due to the limited overlap of the two companies and substantial competition in the areas they overlap, it aims to get approval by the end of 2007.

Dobson will be merged into AT&T's wireless operations, which is led by Stan Sigman, president and chief executive officer of AT&T Mobility.

AT&T said the net present value of potential synergies were around $2.5 billion -- generated by reduced roaming expenses and savings from overhead and operational costs.

AT&T expects first-year dilution to earnings per share from the deal to be between 3 cents and 4 cents on a reported basis and that the deal will have a positive and growing impact on earnings from the second year after the acquisition closes.

AT&T added that its financial outlook remained unchanged, with expected double-digit adjusted earnings per share growth in both 2007 and 2008 and growth in free cash flow after dividends of $4 billion to $5 billion in 2007, growing to more than $6 billion in 2008.

The deal came on the same day as Apple's iPhone, a music and video playing phone expected to reshape the mobile industry, was launched. AT&T is the phone's exclusive wireless carrier for the next two years.